to mortgage ourselves over our heads?

[NCFC4now]

DH will read this so I suppose your opinions will help settle a debate.

DH is 32 and I am 27. We currently own a 3 bed semi Victorian house, it is in a desirable area we love, in the 18 months since we’ve moved in the value increased £75k (bank mortgage valuation) because of the housing bubble.

We over pay our mortgage every month and have a growing amount of equity (especially with the increase!)
However, whilst I love our house, it doesn’t have parking and I find the garden just a bit sad (neighbour has huge trees that block out a lot of sun because the garden isn’t big). Due to the area, parking is difficult and you tend to have to park down the road from your own house.

Because of our location, which we won’t compromise on, a 4 bed with parking, nothing fancy will be £1m. We can get a mortgage for £800k. In my mind, we should wait 2 years (fixed rate ends) and save as much as possible and go for it.

Using present rates available to us, our mortgage minimum payment would be £2.7k a month over 30 years. We can afford this but would mean we can’t really do a step wrong. It would also mean our savings are wiped out due to SDLT so would need to replenish those.

I grew up in poverty and we have achieved everything without any help so I suppose a big house has always been a symbol of achievement to me.

Is it a dumb idea? Tell me your thoughts! I am a bit scared about losing our jobs and whilst DH is a teacher so safe, his extra income comes through a business he runs which I think is stable but you never know. I also hate working and have some mental health issues. Also this could be made worse financially if we do have kids as planned in a couple of years…

DH wants the house but doesn’t want the debt and thinks we should stay put. My argument is simply that having a child and no parking space will cause a breakdown at some point if I’m already stressed whilst fit and childless about the situation.
Thanks

IF you will not be able to stomach a 3% rise in interest rates then no. They will need to start going up soon before inflation gets out of control. Well, I bloody well hope they will anyway.

@RugCarpet22

I think it's a bit too risky. People are saying twins, but what if you had a child with additional needs and one of you had to stay at home to be a carer? Or one of you fell seriously ill? You say you suffer from depression.. What if it came back much worse as pnd and you could not go back to work for a while? I mean these are all hypothetical scenarios, but not too far fetched. Having a baby can bring a lot of previously unthinkable emotions, situations and considerations and the last thing you'd need at that point would be immense financial pressure to go back to work as early as within 6 months from birth.

I understand your desire to have the house you dream of, but sometimes peace of mind is more important than anything else. With your combined income you can enjoy the good things in life and not to become a slave for your mortgage.

This OP. I wouldn't advise anybody to overstretch themselves on a mortgage until AFTER they're done having children. Of course any member of the family can fall ill, lose job etc etc but pre vs post children is a very different ballgame. And a mortgage is a fixed commitment - you can't change your mind easily!

DP and I are in a similar position (with both our salaries set to increase) except that he's you. And I've told him that I don't want to be house poor. Your time - the hours of your life are worth so much more than money. A small mortgage will let you go part-time, change jobs easily, etc etc. You'll never be stuck.

We are so lucky to have such low rates at the moment

Are we?

No we are not, it's fucked the housing market

Thanks for the input.

DH’s side business is a company that earns well and is stable provided he is fit and well.
I have income protection and life insurance through work.
DH has death in service and life insurance policy.

We would potentially have childcare through my parents. I also work from home all the time at the moment and this will go to 2-3 days at home as a minimum.

I am highly qualified - there are not enough people who do my job for the amount needed. Every company needs a me so there’s ample jobs available so I am not too concerned about not having a job - it just may not be as high. The earnings path I am on does put me at earning £100k in the next 2-3 years.

I also don’t work manic hours, I usually go to the gym in the middle of the day, shopping etc. As long as the work is done I can fit my hours how I see fit so a lot of people have their children around them in the days they’re home and it’s considered acceptable. I understand this isn’t the most feasible option though in the first few years - I might never conceive though, who knows.

There’s also the fairly horrible thought that if / when parents pass, the inheritance would be significant enough to not have a mortgage. But I don’t rely on this and would rather never think about it happening.

We're in the same financial position, similar age, but did not max out on the mortgage.
Instead we've flipped several houses - lived in them 12-18 months then sold for a reasonable profit. Consequently we're in an expensive house but our mortgage is tiny - I'll never have to work. Would that be an option for you?

In this economic climate & high stamp duty & building costs I'm not sure flipping is a good idea.

How did you actually manage to flip so many houses in your 20s?

Thanks for the input.

Meanwhile if all the above wishful thinking goes wrong.

@housestuff As much as I’d love to we just don’t have the skill or the mentality, but congratulations on your achievements. Amazing!

@Againstmachine I meant this genuinely ha

Why do you need a four bed house if you don't even have one kid yet? Can't you look for a 2/3 bed with better parking and a better garden?

@Againstmachine I meant this genuinely ha
Oh ok no sympathy if you get in over your head and if interest rates rise.

Oh and stealth boast about wages.

[quote NCFC4now]@marykitty it sounds so stupid, but how much is childcare and for what? And how long do they need it (I’m assuming the free childcare gov hours eventually kick in) CLUELESS![/quote]
Are you serious!?

Definitely clueless (in the nicest way!).

It sounds like you’ve done well for yourselves so far but it sounds like you would be treading a very thin line. If you don’t like working now, you won’t like working when you have (expensive) children and have to juggle school runs etc. I work 3 half days and it’s a nightmare even with that.

It just wouldn’t be sustainable.

I would hate to live without a driveway, so I see your point there. But why not look for a smaller property? Does it need to be 4 beds? I have a 4 bed house (me, DH and 1 DC) and the rooms just become junk storage.

@JustMarriedBecca

Remember the 70s and 80s where interest rates went up to 11%. Absolute stupidity IMO. Stay put. You can't afford it.

I thought it was 15%. I also had negative equity. Do not assume that house prices will continue to rise.

Free childcare - it is at a fixed rate too. So you certainly don’t get the full amount for free if you use a private nursery.

I think you are being selfish. Most of us don’t like working - so are you expecting your partner to continue working paying an enormous mortgage whilst you stay at home?

@buttermutt assuming that's directed at me. Started at 18, through desperation actually as I was unexpectedly pregnant with DC1. My DH worked his arse off. Shortest time we had a property was 6 months. We got our latest one at the beginning of the year, definitely still money to be made if you're willing to put in hard graft. It's more of a hobby for us now and the only things we won't touch are gas and electrics.

Thank you op. Good luck with your decision.

I think you are being selfish. Most of us don’t like working - so are you expecting your partner to continue working paying an enormous mortgage whilst you stay at home?

🤔

@housestuff yes it was. Buying at 18 is highly unusual, most people take yrs to save for a deposit. An 800k house has 30k stamp duty due which is not insignificant.

If in those 24 months you have a month where you cannot set aside the (£2700 minus mortgage payment), congratulations! - You've just shown yourself what a risky move you are considering. Chalk that one up to a hypothetical letter from the mortgage provider, warning you to make up the shortfall & fining you for falling out of your agreed terms.
Do it 3 times in 24 months? - congrats again - you are on the road to a hypothetical repossession procedure warning excellent way of putting it!

Op you and I are "health twins" I also have endo and ocd

Before having dd I lost 3 and required several surgeries that can impact on work/earnings too.

I'm sure you know this already but ANY Additional stress even if seemingly completely unrelated can make the ocd worse.

I also have a physical disability following a car accident.

This is what I mean by "you never know" -

Aged 26 I was happily married, working full time in a well paid and secure job, no child at this point (though not for lack of trying!), was slim, fit and healthy (running half marathons etc)

By 32 I was - a divorced, disabled, unemployed single mum.

I would not have predicted how things went for me and nor did any of my friends and family or even exes family!

You just don't know what's in store for you.

Now I know some will say "you can't live your life always expecting the worst though" which is true, but I think a balance has to be found.

Cautious optimism.

Some studies show that twins/multiple pregnancies are more likely with endo in some cases as some of us double ovulate. I do. One of my pregnancies prior to dd was twins. It was a rare pregnancy as one was in womb one was in Fallopian tube this is why it became so complicated.

@peboh

In a large four bed home, your bills alone could amass to over £1000. I live in a 2 bed flat, and our essential utilities are over £700. Whilst you may think you can afford the mortgage payments, you haven't factored in the jump in price on all your other monthly payments.

I have a large 4 bed - essential bills are nowhere near £1,000 a month! More like half that.

@NCFC4now

The current company I am in is 6 months paid maternity at 100%. In my head I’d just have to go back at 6 months - it’s very lucky. It tapers down after that but I’m not sure on the % by weeks. I haven’t asked.

@CSJobseeker I read that thread. I completely understand. But to put it in perspective, we’ve never had a leased car, I recently bought my first ever car (couldn’t justify it previously as I get a train to work) which is a 2008 and DH just upgraded to a 2010! We will hope to keep these cars for at least a few years.
DH rarely buys clothes, I only buy second hand for environmental reasons. I am definitely the bigger spender but this is only since COVID as I found it a way to cope. Before I was very frugal and we were saving for the house we live in now.

We will wait 2 years but it’s more just deciding a life plan on feasibility. Of course we could be in a completely different place in 2 years. Could even be divorced (hope not!)

You’d be even luckier if you didn’t HAVE to go back full time at 6 months.

@buttermutt you're right it's not cheap. But if op had any interest in doing it, which she doesn't, she wouldn't start at an 800k house. If you do it right the stamp duty forms a small part of the overall profit.

Imo it's quite difficult to climb the property ladder in this day & age by flipping.